Practically Speaking about Retail FM

Imported Wood Flooring from China Raises Health Concerns

Environmental, Health, and Safety

Concern over imported wood flooring from China reached global audiences recently when 60 Minutes reported that a large supplier of imported flooring to the U.S.  knowingly provided products with high levels of formaldehyde, a known carcinogen. Although the company has denied its products are dangerous, the debate is ongoing.

According to PRSM Member Randy Weis, Chief Executive Officer of RD Weis Flooring Solutionists, now would be a good time to investigate the source and manufacturing origins of flooring purchased during the past few years and especially flooring installed in California, which has strict guidelines regarding the amount of formaldehyde present when the flooring is unpackaged and installed.

As an ongoing precaution Randy recommends purchasing flooring materials made in the U.S., to U.S. specifications.

"The products from China are very popular," Randy says, "they are less expensive and that is a key reason for their widespread use in commercial and residential applications. I would say that if you are using LVT or Laminate flooring from China, the cost increase vs U.S.-made, safe products is probably less than $2,000 per retail store. A small price to pay to insure the public safety."


Strategic Sourcing Retail FM: Lowering Costs without Sacrificing Quality of Service

The pressure to lower costs continues to impact how FM services are bundled and in some cases broken out of the traditional delivery model. In some areas such as janitorial, the services are being commoditized and the motivation to lower costs is actually driving small companies out of business, giving the impression that retailers don’t care about clean store environments.

Responding to the need to help retailers and suppliers navigate through the process with the added level of scrutiny and interaction from procurement, the PRSM Sourcing Committee has developed a comprehensive set of user-friendly worksheets that can help the entire industry collaborate more effectively.

The updated PRSM Sourcing Toolkit now includes a collection of worksheets to assist retailers from documenting needs and maintaining standards to completing scorecards from respondent material. The materials are useful to suppliers in better understanding how to respond to RFPs, while differentiating services and making the case for greater transparency.

PRSM Members go here to Download the interactive Sourcing Toolkit User Guide. You may download the templates individually or as a combined unit.

  1. Needs Assessment - a guide to help you outline your requirements.
  2. Execution Timeline: an outline to help you segment the time required to reasonably complete each step in the process.
  3. Financial Implications: a guide to help you compile your terms of service.
  4. Identify the Providers: a guide to help you create a short list of providers to receive the RFP.
  5. Create the RFP: a guide to help you structure questions and goals of the RFP.
  6. Ranking the Respondents: a comprehensive guide to ranking and scoring respondents, to assist in final decision making.

Download All Templates + User Guide (ZIP File)

Thanks to the Sourcing Committee for providing these resources. Good luck and happy sourcing.


Lower the Cost of Service Calls by Adopting Fleet Operational Standards Found in New PRSM Benchmarking Report

Budgets, Finance and Metrics

Although the bottom-line on every invoice doesn't include a breakdown of the many costs incurred when a truck and technician show up at the retail store location, the more retailers and vendors understand about this aspect of the business, the better they can strategize to minimize these costs where possible.

Matt Ashwood, PRSM Member and President of Bonded Filter Co., who participated in the new PRSM Benchmarking Report "Supplier Fleet and Technician Operations and Practices" said the results provided him with direction on lowering costs. "About seven percent of our overhead relates to fuel, lodging and per diem, basically the cost of keeping trucks and technicians out in the field. That's a big number," Matt said, "and understanding what others do to manage those expenses is beneficial for us."

"When we see increases in our expenses it puts pressure on our bottom line. We studied these survey results and made some changes to align our company with the best practices provided in the report. The effort we put in to managing our costs enables us to deliver a cost effective service to our clients."

Here are some key findings from the newest PRSM Association Benchmarking Report "Supplier Fleet and Technician Operations and Practices."

  • More than 90 percent of the suppliers use gasoline vehicles. However, 62.5 percent of the suppliers use only gasoline vehicles. Other fuel types might be more economical, depending on factors like distance traveled, percent of city travel vs. highway travel and cost of alternative fuels.
  • The maintenance on the vehicles is performed by in-house staff at one-half of the supplier companies. Most companies in this study who service vehicles in-house and purchase parts and supplies in bulk reported higher maintenance costs.
  • Suppliers spend more on repairs than on regular maintenance. The average regular maintenance cost for changing oil, filters, etc. for a truck is $1,593 per annum versus the average repair cost of $1,881 per truck annually. The average regular maintenance cost for changing oil, filters, etc. for a van is $1,192 per annum versus $1,377 for repair.
  • Suppliers reported increased customer satisfaction and more efficient routing because of the ability to track vehicle location. Sixty-three percent of the suppliers track the real-time location of their fleet.
  • Most companies, (i.e., 72 percent) have work that requires technicians to spend less than two nights per month out of town and use hotel accommodation. More than one-half of the suppliers, (i.e., 55 percent) reimburse the technician for actual expenses and 27 percent of the companies compensate the technician by paying a fixed amount per day.
  • Only 40 percent of the suppliers have coverage for uninsured / under insured motorists.

Were you surprised by the results of this survey? Like Matt, did you find areas for improvement in the results?


Are you prepared for "the talk?"

Budgets, Finance and Metrics, Sourcing, Purchasing, and Procurement

Are you prepared for "the talk?" Not with your kids, but with your C-Suite.   

During the weeks that have passed since drafting my article for the November/December PRSM Magazine, my unofficial count of recent executive changes in retail has increased from 25 to 28. 

As a key player in the success of your CEO, have you asked yourself how you can help her or him be successful? Stores are a huge asset on any retailers' balance sheet, so naturally those costs are highly visible. Have you assured your C-suite that you're part of the solution, not the problem?  As a service provider have you considered how your services added to that brand's value? 

CEOs need you (although they may not always know it) to be at the top of your game each day. At a moment's notice, can you concisely articulate the value facilities management or sourcing brings to the brand? Do you have your talking points written? How about those statistics which demonstrate the savings you have generated in the past year? This presents an opportunity to sell yourself that you can't underestimate. 

Too many FMs aren't ready for this conversation and miss the chance to prove the value of a strong FM team. I've spoken to a few professionals who just want to fly below the C-suite radar and hope questions never come. I know others who are well prepared and have their talking points and analyses ready. To help you prove your value, PRSM has developed Talking Points to get you started. You can get our new resource tool by emailing me directly at pdameron@prsm.com.

And while you're at it, demonstrating your team's value to the success of the brand, don't forget to put in a good word for PRSM Association and the value it provides to you as Retail Facilities Management Professionals.  


Is Your Data Informing, or Driving, Your Decision Making

Budgets, Finance and Metrics, FM Business Practices and Strategies, Sourcing, Purchasing, and Procurement, Technology, Vendor Management

Data mining and analytics has always been second nature to facilities managers, Kirk Beaudoin, 2014-15 President, PRSM Association, said in his opening commentary in the 2015 Trends Report.

In one of the Report’s profiles of excellence in retail facilities maintenance we learn how Nike with the help of its service provider, ServiceChannel, combined efforts to help the global retailer improve their decision-making processes and strategic planning.  Nike developed a report on janitorial costs, breaking the information down to spend per store and per frequency. “We then used pivot tables to look at several what-if scenarios,” said Shawn Browning, Territory Facility Manager at Nike. 

In another report we see how Brixmor Property Group is gathering and analyzing data thanks to a Divisions Maintenance Group mobile application. The app helps them capture data related to site inspections and helps property managers keep track of each work order via a dashboard, which aggregates information and displays it in a manner that brings attention to problems that require immediate attention. 

Two days of exploration on data gathering and data management produced a number of valuable learning opportunities at PRSM Mid-Year Conference, held last month in Columbus, OH including a presentation by Douglas Stephens, the Retail Prophet, giving a global perspective on the value of data to all parts of retail, followed by sessions conducted by retail and vendor subject matter experts from Lowe's, Wiedenbach Brown, Sears Holdings Co., PETCO Animal Supplies, Walmart Stores, Gap, Family Dollar Stores and others. Download decks from many of the sessions at this link and continue the discussion, online at our LinkedIn Group

The quest for more data is likely to continue in parallel with the need for better data management and analytics, tools and processes. Take advantage of your PRSM resources to learn how others are making the most of their existing data and are learning how to be data-informed and not necessarily data-driven.


Self-Performing vs. Non-Self Performing: The Debate Continues

FM Business Practices and Strategies, Vendor Management

Do self-performing contractors really exist? Or, are you more likely to stumble across the Loch Ness Monster in your search for one? And is it self-performance that really matters?  This discussion gets a fair amount of play across the industry and rightly so, as we have seen in the proliferation of commentary on the topic.

In “Self-Performing Lighting Contractors and the Lock Ness Monster,” an article in the coming November/December PRSM Magazine, John Loheit at the Energy Management Collaborative warns, “The reality is that most contractors who claim to be self-performing might be on some level, but possibly not for a project of considerable size. The self-performing model that allows a firm to gear up for 300 locations and then gear down while it waits for another 300 store roll-out isn’t practical – unless the roll-out you are planning takes place over a period of 18 months or more.” 

“To provide a competitive price, it is important for the vendor to keep the amount of movement by crews to a minimum. The company that won the bid knows this. While it may have claimed to be self-performing, the plan all along was to take advantage of the local partners it’s worked with in the past to live up to the contract. The contracting company banked on the fact that rapid response was more important than whose truck actually showed up to the location.

In her recent PRSM Magazine article Self-Performing: Evolution or Revolution? Susan Dykman of NRS Construction and Facilities Management says that although “pure self-performing companies exist on a local or regional basis, I know of no company, in any of our service trades, that can honestly say they self-perform all of their services on a national basis.”

“Having worked on ‘both sides of the fence’ I can safely say that the retailer benefits strongly from the self-performing model.” In this model, “Service-level compliance is at its highest level, there is a much greater control of the actual work being done and the professionalism of the technician can be closely monitored.”

For more reading on this ongoing topic, go here.

 


Planning for 2015: is Yours a Bottom-Up or Top-Down Approach?

Budgets, Finance and Metrics, PRSM, Sourcing, Purchasing, and Procurement, Vendor Management

In the July/August PRSM Magazine, Tips and Trends, Amruta Vantipalli, PRSM Association Industry Program Manager, provides a high-level review of the Retail FM budgeting process using data from a recent survey “Retail Facilities Management Industry Overview.” More than 100 retail organizations participated in the survey, which reflects a combined 135,000 stores with more than 2.3 billion gross square feet equaling over $3.1 billion in annual FM budgets.

Among the challenges in estimating annual expenses – the survey points to evolving organization needs and customer needs, fast changing technologies, sales, etc. Internal budgeting processes, also add unique challenges to the process. Two approaches seem to be prevalent:

  • Top-Down Approach: when top management prepares the budget and conveys to the team the performance goals and expectations.  
  • Bottom-Up Approach: with middle management preparing the budgets and seek approval from top management.

Both have advantages and drawbacks. The Top-Down Approach can sometimes alienate management teams, who find it difficult to balance store needs with upper management’s lack of insight. Although the bottom-up approach gives the opportunity for lower-level managers to drive the budget, and at the same time improve team morale, one drawback to this approach is the time consumed by the team involved in the back-and-forth process. 

According to the PRSM survey, about 21% of retailers use a bottom-up approach and arrive at their total budget either by summing up the budget for each store or by summing up the budget for each trade. Typically these retailers have fewer stores and less store area on average compared to the retailers using other approaches. 

The survey also revealed that 62 percent of respondents use incremental budgeting due to its simplicity and popularity. 

See the complete results for this survey, which explores finance and budgeting as well as a wide variety of other topics, including the FM Business Model used across the industry, maintenance strategy, vendor management, technology and sustainability. Follow this link.

 

 


Help has arrived to evaluate RTUs for replacement

HVAC

Although the benefits of replacing old rooftop units are well documented, it can be difficult to prioritize potential RTU improvements according to highest return on investment. The condition and performance of existing RTUs are critical variables in this equation, and there is a lack of standardization around RTU evaluation. Help has arrived, however, according to the 2014 Best Practice submitted by National Renewable Energy Laboratory, in the form of an information campaign and Department of Energy checklist.

The Department of Energy (DOE) Advanced RTU Campaign (ARC) has developed an RTU field checklist designed to standardize visual-based field evaluation of existing RTUs. The checklist uses clearly defined performance bins to quantitatively evaluate the condition and performance of key RTU components - condenser coil; refrigerant piping; exterior cabinet; evaporator coil; burner section; compressor; air dampers; and fan motors - and compile individual component evaluations into a whole-unit score that accounts for the relative impact of each component on overall performance.

The checklist is also designed to help identify damage, dysfunction, or degradation that requires more than routine maintenance. To streamline the field evaluation process, only components whose condition are deemed to impact the rating of the overall unit are included. 

 

For more information visit: http://www.advancedrtu.org/

 


Quotables from PRSM2104 National Conference

Budgets, Finance and Metrics, Building Automation Systems, Environmental, Health, and Safety, FM Business Practices and Strategies, PRSM, Sourcing, Purchasing, and Procurement, Sustainability, Vendor Management, Waste and Recycling

If you didn’t take notes during your favorite FM sessions at PRSM2014 National Conference look to the post-event web site for session recaps, photos and other useful content. 

Below are a few nuggets of wisdom gathered during the three days in Orlando.   

Developing and Implementing a Hazardous Waste Management Program (HWMP)

“Look at the waste you are generating and see what your options are. You should try to reuse, recycle or reclaim.”
Jeff Dean, PSC Environmental Services, LLC

 

Prevention and Cure of Contractor Performance Issues

“Scope, scope, scope” when determining expectations in an RFP. “If it is not clearly defined, the facility manager and the vendors will have different interpretations.”
Nick Finia, Sr. Mgr. Maintenance Energy Capital, Walgreens

 

Sourcing Retail FM

“Cost, cost is the real reason we are all in here today.”
David Acquaviva, DVP Procurement, Sears Holding Co.

 

What Successful Leaders Do Well

“If your employees were volunteers, would you treat them differently?”
Jim Knight, Executive Edge, motivational speaker

 

The Industry is Evolving: Re: Think Retail, Facilities, Ourselves

“How much re-thinking have we all had to do as a result of this ever-shifting landscape?  How many of us here today, for example, got a new logo on our business cards over the past 12 months?  How many of us have had to deal with the results from team reductions and expansion?”
Kirk Beaudoin, President, PRSM Association 2014-15 Board of Directors


Make Change Stick

“You have to see something that’s going to make you feel something that’s going to make you change.”
Chip Heath, keynote speaker, change expert

 

Maintaining Aging Equipment

“The reactive mode is four to six times more costly than maintaining equipment in ‘like new’ condition.”
Michael Cowley, President, CE Maintenance Solutions

 

Generation Differences in the Workplace

“Remember to Re:Think how you are communicating across the generations, because what works for communicating, training, retaining and engaging one generation won’t necessarily work for another. At the end of the day it’s not about right or wrong, better or worse, it’s about understanding that each generation brings something different to the table”
Scott Zimmerman, Lynne Lancaster and Kim Lear, Generation Trio, general session motivational speakers

 

Committees Support PRSM Association

“Together, we are moving the association and the FM Industry forward thanks to you, who drive our work alongside the PRSM Team, and generate exceptional, industry leading content.”
Tim Backstrom, Immediate President, PRSM Association 2013-14 Board of Directors

 


Retail is in Good Hands

FM Business Practices and Strategies

While visiting EuroShop last month in Dusseldorf, Germany, it was striking to me how big the global retail industry really is.  PRSM Association members were among the 109,000 attendees from 110 nations at the trade fair.  EuroShop is the largest retail trade fair in the world featuring the upcoming products available to the global retail market.  Not only were there seasoned professionals, but there were tons of young adults from universities throughout Europe waiting for their turn in the retail industry.

Traditionally focused on design and construction, this year’s fair also featured many new features relevant to facilities maintenance and sourcing professionals who have the responsibility for maintaining the unique shop fitting and design elements of retail stores. Lighting technology was once again a big  draw for the attendees with LED lighting dominating the scene.  Unique flooring options were also prevalent and viable alternatives for high traffic retail environments.  

While at EuroShop, PRSM hosted an International Retail Exchange for approximately 20 European and U.S. Retail facilities professionals.  During the morning session, they had the opportunity to discuss current challenges of facilitating maintenance requests across country lines and finding qualified vendors to service their stores.  Retailers attending were from Abercrombie & Fitch, Apple, Bose, Fossil, Gap, and Tumi. 

I left Dusseldorf with a renewed respect for what retail professionals bring to the industry.  Their creativity, knowledge, and ingenuity make this a remarkable industry.   Follow this link for more information on EuroShop 2014.   

 


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